Fundamentals of accounting

This free course, Fundamentals of accounting, will introduce you to the essential concepts and skills of bookkeeping and accounting in four weeks.

To start with you will learn about the fundamental difference between bookkeeping and accounting. In Week 1 you will also learn how the purpose of management accounting differs from that of financial accounting. In Week 2 you will gain some practical skills in numeracy, including learning about rearranging simple equations such as the accounting equation. In Week 3 you will gain knowledge and understanding of the fundamental concepts that underpin double-entry accounting. You will also learn the rules of double-entry bookkeeping and how to record transactions in ledger accounts. In the fourth and final week you will learn how to prepare a trial balance and the balance sheet (also known as the statement of financial position). In the final week you will also be introduced to the income statement (also known as the profit and loss statement) and how it fits with the accounting equation and the balance sheet.

When you complete the course you'll receive a free statement of participation to help you to share your achievement.

Learning outcomes

After studying this course, you should be able to:

understand and explain the purpose and role of bookkeeping and accounting, both financial and management, within any business

understand and apply the key numerical skills required for accounting

understand and describe the three concepts that form the basis of double-entry accounting (the business entity concept, the accounting equation and the duality concept)

record transactions in the appropriate ledger accounts using the double-entry accounting system

balance off ledger accounts at the end of an accounting period and prepare a trial balance and balance sheet.

You can start this course right now without signing-up. Click on any of the course content sections below to start at any point in this course.
If you want to be able to track your progress, earn a free Statement of Participation, and access all course quizzes and activities, sign-up.

Course content

In this week you will learn about the key differences between bookkeeping and accounting and how accounting gives answers to four fundamental financial questions. You will also learn how a business can make a profit yet have negative cash flow. The final aspect of this week’s learning is how financial accounting differs from management accountin...

Expertise in mathematics is not required for you to succeed as an accountant. The core skill needed is the confidence and ability to be able to add, subtract, multiply, divide as well as use decimals, fractions and percentages. The learning material this week thus covers the basic numeracy skills from multiplication and division, through to deci...

As you learned in Week 1, accounting is a process that involves:the systematic recording of all relevant financial transactions and eventsclassifying, interpreting, summarising and reporting such bookkeeping datathe production of useful information from that data and its presentation to stakeholders of a business such as owners, lenders and the...

In Week 3 you learned how to record transactions in T-accounts using debits and credits. This week you will learn the crucial process of ‘balancing off’ each T-account in order to record the correct figure for each account in the trial balance. In Week 4 you will learn how to prepare the trial balance and the balance sheet. You will also...

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Copyright information

Creative commons: The Open University is proud to release this free course under a Creative Commons licence.

However, any third-party materials featured within it are used with permission and are not ours to give away. These
materials are not subject to the Creative Commons licence. See terms and conditions and our FAQs.

Full copyright details can be found in the Acknowledgements section of each week.

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